Brazil in the World: Brazil's New Role in Global Institutions and the British Response

Meeting Summary Brazil in the World: Brazil's New Role in Global Institutions and the British Response

6 November 2012

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Brazil in the World: Brazil's New Role in Global Institutions and the British Response

KEY POINTS • In 2012, Brazil became the seventh largest economy in the world. In 2013, it may drop a few positions because of the currency situation, but it will stay among the 10 largest. In 11 years, Brazil’s economy has grown by 209 per cent. • Despite these impressive figures, the tax rate (36 per cent) is a major problem for Brazil. Although there is no fiscal deficit, there is a deficit of investments (below 20 per cent of GDP in the last six to seven years) because of the heavy tax burden. • Investment in infrastructure is also below two per cent of GDP, which is catastrophic for Brazil (for example it is eight per cent of GDP in China and six per cent of GDP in Colombia). The government and the private sector are not investing. Protectionism is also a problem. Productivity is another worry for the Brazilian economy; it has been growing very slowly. • As a global trader, Brazil has no other option but to focus on multilateralism. It has played a leading role in the Doha round, challenging the advanced economies to deliver their promised development agenda and has actively contributed to the core negotiating groups and to the debates on WTO reforms. • Brazil has an emphatic realist approach in its foreign policy but implemented with a twist, which is the focus on soft power and the consistent defence of autonomy and non-intervention. • Brazil seeks UN Security Council reform, supporting greater representation, including a permanent seat for itself. Brazil has been vague on how the Security Council should work. Instead, it prefers to draw attention to specific problems such as the need for sanctions reform. • On climate change, Brazil was well positioned to wield influence both given its historic role being the spokesperson for the G-77 and also its emerging role as one of the key countries in the Copenhagen Climate Change Summit (along China, South Africa and India). However, in the last few years the coalitions of the G-77 have been shifting and it is unclear whether Brazil will proactively act to shape its role by moving forward from its previous alliances or whether it will have its role shaped by others. • In Africa, Brazil’s engagement has changed dramatically since 2007–08, when the biggest oil discovery in 20 years was made in the country. In coming years, Brazil will become a major oil exporter and its demand for oil from Africa will diminish. Today Africa is becoming a growing consumer market and Brazil looks at it as a promising market to export its goods and services. However, Brazil’s interests in Africa go beyond the economic sphere. Its engagement has been shaped by its commitment to Africa’s development challenges and seeking support for Security Council reform.

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PROGRAMME

Session 1: Brazil and the UN

Prof Maria Regina Soares de Lima | Institute for Social Research and Policy (IESP/UERJ) Ambassador Luiz Augusto de Castro Neves | President, CEBRI

Chair: Prof Victor Bulmer- Thomas CMG OBE | Associate Fellow, Chatham House

Session 2: Brazil and the G20, Brazil and the WTO

Dr José Pio Borges | Partner Manager, RJX Investimento Ltd; former Chairman, Brazilian Development Bank Dr Mahrukh Doctor | University of Hull Chair: Dr Timothy Power | Associate Fellow, Chatham House

Session 3: Brazil and the Climate Change Negotiation

Adilson de Oliveira | Professor, Instituto de Economia, UFRJ and Director, Colégio Brasileiro de Altos Estudos

Shane Tomlinson | Director of Development, E3G, Third Generation Environmentalism

Chair: Robert Bailey | Senior Research Fellow, Energy, Environment and Resources, Chatham House

Session 4: Brazil and Africa

Christina Stolte | German Institute of Global and Area Studies (GIGA), Hamburg Dr Marco Vieira | Lecturer in International Relations, University of Birmingham Chair: Alex Vines OBE | Head, Africa Programme and Research Director, Area Studies and International Law, Chatham House

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SESSION 1: BRAZIL AND THE UN Topics: This session included discussion of Brazil’s bid for a permanent seat on the UN Security Council but also its existing role in UN missions such as MINUSTAH

Maria Regina Soares de Lima

Soft balancing and soft power as major strategies of Brazil in the UN Brazil has used soft balancing behaviour and soft power instruments in the United Nations to push for reform of the collective security system. This strategy combines a concern with the legalization of rules to control the use of force and to further institutionalize the collective security system, combining soft balancing behaviour with a constructive engagement to reach those objectives. Brazil and the other IBSA countries (i.e. India and South Africa) are not revisionist powers; they want to reform the UN framework rather than to contest the structure of world power.

The reform of the UN Security Council and Brazil Brazilian participation in multilateral forums has been a recurring theme of the country’s foreign policy since the late nineteenth century. Brazil participated in all conferences leading to the structure of the post-1945 world order. During the 1960s and 1970s its multilateral activism focused on development with an emphasis on North-South issues and a lower profile in East-West issues. Nonetheless, Brazil has been a consistent critic of the global collective security system in dealing with international conflicts through the prism of the balance of power.

Among developing countries, Brazil and India have occupied more regularly a non-permanent seat in the Security Council. Between 1946 and 1967, Brazil occupied a non-permanent member seat five times and since 1988 it has occupied a seat another five times.

The Brazilian position in the reform agenda of the UN focuses on three points: a) the defence of multilateral principles and norms, especially in cases involving the authorization for the use of force pursuant to Chapter VII of the UN Charter; b) innovative solutions capable of establishing conceptual boundaries between mechanisms for the maintenance of peace and those for peace imposition; and c) changes in the decision-making framework of the Security Council, with the objective of allowing it more representativeness and legitimacy in the post-Cold War order.

(a) The emphasis on multilateralism reflects Brazil’s classical national identity as a mediator in multilateral diplomacy. Traditionally, the role of mediator has been played out in the realm of North- South negotiations. More recently, its role as mediator has been expanded to encompass issues of global security and reflects, from a Brazilian perspective, its capacity to forge consensus between extreme positions within the world order.

(b) The conceptual distinction between ‘peacekeeping’ operations and ‘peace enforcement’ missions, which imply the use of force, adds three basic components to Brazilian foreign policy: the defence of the principle of non-intervention; adherence to peaceful settlement of disputes; and the notion that security threats stem first and foremost from economic causes. The Brazilian concern is focused on the multiplication of sanctioning regimes and the need to regulate them in such a way as to neutralize their arbitrary use by the permanent members, and on the need to add ‘preventive diplomacy’ measures to international cooperation for development. The creation of a Commission for the Consolidation of Peace, as suggested by the High Level Panel and endorsed by the report by Secretary General Kofi Annan in 2005 gave Brazil the opportunity to play a prominent role in the 2004–05 biennium during its mandate in the Security Council and to reaffirm its desire to include development-related issues in the mandates of peace operations.

(c) Regarding Security Council reform, the Brazilian position is to support greater representation and particularly the increase of the number of permanent seats. Brazil’s aspiration to occupy a seat was officially announced in 1994 by then chancellor Celso Amorim, and since then this policy has been adopted by all succeeding governments. Brazil believes that the expansion of the Security www.chathamhouse.org 4 Brazil in the World: Brazil's New Role in Global Institutions and the British Response

Council is justified by the need to respond to the changes that unfolded in the post-Cold War period and to the considerable increase in the number of UN members since the last round of expansion in the 1960s. A greater representation would confer a greater legitimacy and effectiveness to the decisions of the Council. In 2004, Germany, Japan, India and Brazil constituted the G-4 with the aim of coordinating common position for the expansion of the Security Council.

Soft balancing at the UN

Soft balancing is the ‘use of non-military tools to delay, frustrate, and undermine major power policies’. Soft power measures include international institutions, economic statecraft, and diplomatic arrangements to oppose or challenge major power preferences or policies. Since the end of the Cold War second-tier states have begun to engage in soft balancing, which involves the formation of limited diplomatic coalitions.

President Luiz Inácio Lula da Silvas government followed a multi-layered grand strategy that emphasized a gradual and peaceful – yet nonetheless significant – revision of the international order. Given Brazil’s lack of hard power capacity, pursuing unilateral, go-it-alone strategies are not an option. Therefore, the formation of coalitions of ‘variable geometries’ in global governance arenas became the best option. Brazil has sought a proactive role in the process of normative change of various international regimes, and to play a mediator role in collective security issues as was the case of the Turkish-Brazilian-Iran nuclear swap agreement. In fact, Brazil’s behaviour towards the collective security system reform has been a complex set of multilateral engagement initiatives, as in the case of assuming a high level profile in peacekeeping missions; diversification of strategic partnerships, with the formation of coalitions of variable geometries with second-tier states; regional leadership in South America, and South-South partnership and cooperation.

One particular instance of a soft balancing strategy combined with multilateral engagement has been Brazil’s response to different proposals for change based on ‘cosmopolitan’ aspiration, on one hand, and on the other, the reinforcement of the maintenance of sovereignty. Cosmopolitan proposals assume that the individual is the centre of rights and the agent to be protected by international society. The most significant proposals call for broadening the concept of security and adopting a broad definition of ‘threats’ to international security. Sovereignty is viewed as relative and conditional, thus rendering intervention by the international community legitimate. In this regard, the concept of the ‘responsibility to protect’ (R2P) has been the main conceptual innovation in the course of reform process.

These suggestions underlie a reasoning based on ultimate ends as a guide for political action. As such, they are subjected to at least two serious imperfections. The first one, clearly shown in the case of the invasion of Iraq in 2003 The United States invasion increased instability in the Middle East. Another inadequacy of cosmopolitan proposals is that they imply that every political action must require an agent who ultimately decides, i.e. the sovereign. At the international level, states are the ones who ultimately decide whether to use force, given that the international community is a moral concept and not a political agent. This agent can either be a powerful state or an international organization. In order for an action to be morally legitimate it is necessary for it to result not from the decision of the stronger actor but rather from the collective decision of the members of the international society.

On the other hand, sovereignty is reinforced when states are posited as the building blocks of the international system and the Security Council is recognized as the supreme authority in the maintenance of peace and international security. Furthermore, there is a need to define with greater precision the situations in which force can be employed. This is done with the recommendation of a set a rules to serve as guidelines for this collective sovereign: the establishment of a shared vision in terms of how to weight the seriousness of a threat, well-defined objectives for the proposed military action, the evaluation of the existence of alternative non-military means to eliminate the threat, whether military action is proportional to the threat; whether there is a reasonable and clear chance of success. In addition, it is recommended that the deliberations of the Security Council be more transparent. Thus, greater emphasis is conferred to measures aiming to increase accountability, as well as reducing the discretionary powers of the collective sovereign.

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The doctrine of the responsibility to protect (which has been aggregated to the proposals for reform in the 2005) aligns with the widening of the scope of cosmopolitan elements in the normative framework of the UN and represents a significant normative advance in human rights protection. Traditionally, Brazil has strongly supported non-intervention norms and compliance with sovereignty principles. However, this position has slightly changed when it voted in favour of Security Council Resolution 1970, which framed the crisis in Libya in terms of R2P. Later, Brazil and India abstained in Resolution 1973 authorizing military intervention in Libya. Brazil’s concern was that this would set out a precedent for humanitarian intervention for purposes other than protecting civilians, e.g. regime change.

In 2011, Brazil advocated its recommendations on shifting the ‘Responsibility to Protect’ doctrine towards the concept of ‘Responsibility while Protecting’. The major contribution of its concept paper is advocating better control of the use of force in military operation. According to President Dilma Rousseff, ‘The Security Council must ensure the accountability of those to whom authority is granted to resort to force’.

Brazil’s soft power and participation in peace mission operations Brazil has been participating in peace mission operations since the 1940s. In recent years its ranking within participating countries climbed from 45th to 15th.

Such use of soft power indicates a shift in the Brazilian stance and softens the previously held position to refuse to participate in humanitarian operations under Chapter VII. Brazil’s contribution to peacekeeping operations until 2004 was smaller than Argentina’s and far lower than India’s. Therefore the Brazilian acceptance not only to participate but to head the peace force in Haiti, MINUSTAH, in 2004 was a watershed. As of today, Brazil participates in nine peacekeeping missions out of 16.

In the case of Haiti, Brazil has diversified the scope of its cooperation, combining its peace mission operation with other corporations; it donated $55 million to the Haiti Reconstruction Fund of the World Bank and implemented technical cooperation programs around the country.

Luiz Augusto de Castro Neves Brazil’s aspiration to become a permanent member of the UN Security Council is more than 70 years old. In 1945, when the discussions about the formation of the UN were taking place, President Getulio Vargas sent the Brazilian delegation to advocate for Brazil to have a permanent seat at the UN Security Council. Over the years the rhetoric has changed but essentially it is longstanding policy objective. However, like other countries that share its aspiration to become permanent members, Brazil is facing regional problems.

In the Far East, India faces the opposition of Pakistan and China, although to a certain extent, China’s opposition is more discrete than the blunt opposition of Pakistan. In this respect, it should be noted that the recent support by the United States of India’s aspiration, or more previously, of Japan’s aspiration, and its lack of support of Brazil’s ambition, has much more to do with the US policy of China’s containment rather than real support for India or Japan, or with a true willingness to expand the Security Council. As to Japan’s aspirations, Japan needs first to deal with its past before being able to seriously promote its candidacy. In Europe, Germany’s aspiration is countered by Italy’s opposition as well as by the claim that the European Union is already represented as both the United Kingdom and France are permanent members. Thus, to have a third country would mean over-representation, unless there would be a rotation between some countries. In South America, Brazil’s aspiration is opposed by Argentina and Mexico. In Africa, the largest and most powerful African country in this respect would have been Nigeria but due to its domestic political challenges it was never seriously considered to be the African candidate and so, South Africa has been mentioned as the most appropriate candidate to become a permanent member of the UN Security Council. Egypt also has aspired to an African seat.

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In 2005, when there was a perception that a momentum was underway towards the approval by the UN General Assembly of a resolution modifying the UN Security Council, China was the one to pour some cold water on this proposal and the momentum was lost.

The discussion about what should be the responsibilities of a new expanded Security Council continues to be debated. The, Brazilian government believes that economic and social variables affecting peace and security should also be taken into consideration. According to the Brazilian government the Security Council cannot be a body that just implement sanctions against certain countries; it believes that sanctions alone cannot solve problems as the complexity of situations require more comprehensive respond rather than the mere application of sanctions. Moreover, in many cases, sanctions had the opposite effect to the one intended. For example, the United States sanctions against Cuba have been used by the Cuban government not to promote the necessary reforms (with respect to civil and political liberties) that Cuban society desperately needs. In the Middle East, Iran and Syria are the object of sanctions and it is unclear whether these sanctions are effective in achieving the goals they aim to achieve.

As to Brazil, it sought that its position as an important economy and emerging country over the last 15 years should gain it a louder voice in international affairs and that it should participate in decision-making more proactively. However, Brazil has not been able to articulate its position on many issues.

Other questions relate to different initiatives in international affairs. For example, with relation to the Brazilian-Turkish initiative concerning Uranium enrichment in Iran, Brazil was accused of being rather naïve to interfere in the politics of this region. From the very beginning, the Brazilian-Turkish initiative was not perceived as a positive gesture and was doomed to fail. Nevertheless, Brazil decided to go on with it. Brazil’s position was correct to the extent that it represented its position of favouring a diplomatic solution to the Iranian nuclear programme. Brazil recognizes the right of a country to use nuclear energy for peaceful purposes and itself uses nuclear energy for such purposes. In this respect, the Brazilian–Argentine Agency for Accounting and Control of Nuclear Materials (ABACC) provides a good example of bilateral safeguards established to avoid any nuclear arms race between the two countries.

In any event, it is doubtful that there is going to be a meaningful expansion of the UN Security Council in the near future. As happened before in the economic area, where the G-7 and the G-8 became, at least to a certain extent, obsolete and the G-20 has become the leading forum to dictate the direction of the international economy, a similar thing may happen within the UN, as a result of sweeping reform of the organization to reflect not 1945 realities but today’s realities.

Questions & Answers

Questions Is that Brazil aspires to become a permanent member of the UN Security Council enough to convince other countries to support its aspiration? Considering that Brazil dislikes hard power and is not keen on interventions, how according to Brazil, does the United Nations system suppose to generate the public goods of peace and security; or preferably, does Brazil think that the United Nations should not do much and just wait until it is possible to peacefully negotiate solutions to the world’s problems?

Maria Regina Soares de Lima The discussion about the current international support or lack of support of Brazil’s aspiration to become a permanent member of the UN Security Council does not lead anywhere since this alone will not change anything. To reform the UN Security Council there is a need to amend the UN Charter through the vote of all domestic congresses and it is difficult to see how this can happen. www.chathamhouse.org 7 Brazil in the World: Brazil's New Role in Global Institutions and the British Response

As to the generation of public goods, the main issue is that countries like Brazil, India and South Africa can have a very significant role in strengthening the Security Council. The fact that these countries are not permanent members motivates them to try and build more accountability and transparency of the UN Security Council operations. Moral policy never exists without legislation; and to have legislation there is a need to decide who the agent for implementing the actions is; and the agent is clearly the UN. The UN will never be a democratic body; nevertheless, there is a need to allow for more voices to be heard. Allowing the latter will enable the UN to produce the collective goods of peace and security with a stronger authority as its decisions and actions will represent a wider community; and it is in this sense that Brazil will contribute to the production of public goods.

Luiz Augusto de Castro Neves Brazil has been vague on how the UN Security Council should work and how it should deal with a number of problems. Instead, it chose a methodology of pointing out problems more generally, e.g. that sanctions alone are insufficient and ineffective, or that the UN Security Council should allow for a broader representation. Admittedly, Brazil will need to take a clearer stand point if it wishes to become a louder voice in international affairs. On the other hand, one might argue that this approach is intended to and preserves Brazil’s ability to maintain flexibility towards different matters.

Question Why is the United States reluctant to support Brazil’s aspiration to become a permanent member of the UN Security Council? In what sense does Mexico and Argentina have advantage over Brazil in becoming permanent members of the UN Security Council?

Maria Regina Soares de Lima The United States does not support Brazil as Brazil is not considered by it to be in a geopolitical area and the United States does not see any strategic priority in supporting it. As to Mexico, it should be considered as part of North America and thus in many senses its interests in the UN Security Council are already represented by the United States. As to Argentina, Brazil and Argentina have been traditionally competing on the rubric of the most powerful country in South America; their rivalry in relation to the UN Security Council has to do more with this traditional competitiveness than with their specific competencies to represent the region.

Luiz Augusto de Castro Neves As previously said, the support of different countries is a subjective matter that is connected with other goals. Supporting India will promote the United States goal to control China; and supporting Mexico, with whom the United States shares a frontier, may be more important than supporting Brazil.

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SESSION 2: BRAZIL AND THE G20, AND BRAZIL AND THE WTO Topic: Is there a new international economic policy architecture emerging with the G20 and what is Brazil’s role in it? This session included discussion on Brazil’s role in prospective trade negotiations and Brazil’s potential role in the EU bank bailout programme.

Dr José Pio Borges Brazil’s economy

In 2012, Brazil became the seventh largest economy in the world. In 2013, it may drop a few positions because of the currency situation, but it will stay among the 10 largest. In 11 years, Brazil’s economy has grown by 209 per cent.

At first, people in Brazil did not believe that the Workers’ Party government would manage to control inflation, but it implemented a successful inflation-control scheme. Even the opposition maintained the same measures afterwards.

State reforms, the opening of the economy, tariff reduction and several other reforms (concessions of public services such as energy and telecommunications and one of the largest privatization programme in the world) all together contributed to shaping Brazil’s current economy. As a consequence of these reforms, Brazil reduced its dependence on oil imports and witnessed a commodity boom.

Major changes in Brazil’s relations with the world

The first major change regards foreign debt. Since the 19th century and throughout the 20th century, Brazil was heavily in debt. During decades, net foreign debt over exports was always between 200 and 400 per cent. After the reforms, the debt stock started to fall substantially so that today it is almost at the same level as the currency reserves – about 19 per cent of exports and only two per cent of GDP. In 1982, after the second oil crisis, the debt service reached 92 per cent of exports. Foreign direct investments (FDI) also started to pick up during the privatization years. This has been a major change in Brazil’s relations with the world.

A second major change relates to the question of oil dependency. In 1974, after the first oil crisis, total imports of oil were about a third of oil exports. In 1982, after the second oil crisis, it reached 43 per cent of total oil exports. In 2011, imports decreased to reach only four per cent of total exports. Brazil could become a net oil exporter in the next few years.

Third, trade and Brazil’s export trends have affected Brazil’s relations with the world. In 1974, Brazil already had developed an industrial sector but import-substitution programmes and investment schemes started happening. However, that year, exports of agriculture products amounted 60 per of total exports and industrialized products only 29 per cent. Between 1974 and 2002, while agriculture products grew only at 71 per cent, industrialized products grew 1,300 per cent. Industrialization was a key priority for the government. At the time, the idea was that terms of trade would always be negative so that the country had to make a strong effort to industrialize. The next nine years contradicted this trend. Commodities grew 600 per cent while industrialized products grew only 189 per cent. With this boom Brazil started becoming again an important exporter of commodities.

In 2011, China overtook the United States as the most important destination of Brazilian exports. European countries combined are also a larger export destination than the United States. South American countries together have also become very important for Brazil, possibly even exceeding Europe. Therefore, although Germany, Italy and the United Kingdom remain important trade partners, South American countries and China have taken a prominent position in Brazil’s trade relations. As it faces many challenges in developing trade links within the World Trade Organization or Mercosur, Brazil is increasingly trying to reinforce trade relations through other means and with partners with whom it has a more successful record.

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Current problems The tax rate (36 per cent) is a major problem for Brazil. Although there is no fiscal deficit, there is a deficit of investments (below 20 per cent of GDP in the last six to seven years) because of the heavy tax burden. Investment in infrastructure is below two per cent of GDP, which is catastrophic for Brazil (for example it is eight per cent of GDP in China and six per cent of GDP in Colombia). The government and the private sector are not investing.

Other issues are the frequent waves of protectionism such as in the automobile industry. As a result of the global economic crisis and increased imports from China, the government is introducing protectionist regulations (such as those that used to be in place in the oil industry). Productivity is another worry for Brazilian economy; it has been growing very slowly.

Brazil’s relations with the United Kingdom are mostly based on oil and gas. Although there have been problems in the past, future prospects are bright.

Dr Mahrukh Doctor The rise of China and its impact, the global financial crisis of 2008, the great recession of 2009 and then the sovereign debt crisis in the euro zone all have markedly altered the global balance of the economy. Not only has economic dynamism relocated to the periphery, but the role of states and markets – the very nature of capitalism – has had to be rethought and adapted to new economic realities. Brazil emerged out of the crisis relatively unharmed, but has it been able to take advantage of the new opportunities to increase its influence? Can it project itself as a creative and constructive force in reorganizing the international economic system and institutions? Can they help deliver a more equitable and genuinely multilateral system? What can and should Britain be doing to make the best of the shifting power structure? How should it respond to the rise of Brazil in the economic sphere?

Main features of Brazilian foreign policy

First, Brazil’s foreign policy actions are highly instrumental. Brazil has been focussing for a long time on national development objectives. Brazil has a strong developmental discourse and its perceived success has created an attractive system for other countries to follow.

Second, Brazil has an emphatic realist approach, but implemented with a twist, which is the focus on soft power and the consistent defence of autonomy and non-intervention. Autonomy can often be interpreted as sovereignty, such as in the field of security. It also means maintaining policy flexibility in the domestic economic sphere. This is linked to the traditional objectives of Brazilian foreign policy.

The third main feature of the country’s foreign policy is its commitment to multilateralism and diversified relations. Brazil has always participated in international organizations and regimes. Today more than ever, it wishes to participate actively in the reform of international governance structures. Brazil usually presents itself as a mildly revisionist power rather than one wanting a complete upheaval of the international system.

During the Lula years, a fourth aspect to Brazil foreign policy was added: the ideological aspect. Brazil switched from pragmatism and purely economic objectives to a search for prestige and political objectives.

Issues about Brazil’s position in the WTO As a global trader, Brazil has no other option but to focus on multilateralism. It has played a leading role in the Doha round, challenging the advanced economies to deliver their promised development agenda and has actively contributed to the core negotiating groups and to the debates on WTO reforms. Almost from the start, Brazil made its intentions clear. After the Cancun trade ministerial meeting of the G20, the Brazilian foreign minister emphasized the importance for Brazil not to be

www.chathamhouse.org 10 Brazil in the World: Brazil's New Role in Global Institutions and the British Response playing a role of supporting actor in discussions. Brazil is now looking to be actively involved in the multilateral rules-based system.

Things have changed considerably in the last ten years. Given the conditions of the US and EU economies, managing an ambitious but balanced outcome in the negotiating round is becoming increasingly difficult to achieve. There will be a resistance to moving forward.

Brazil’s position regarding WTO reform proposals One proposal is that decision-making should no longer require consensus. Brazil disagrees with this proposal. However, it favours participating in smaller groups and coalitions to come up with proposals that are brought to the larger negotiating table. It led several such groups.

A second proposal is to abandon the principal of single undertaking. Brazil also disagrees with this proposal because it believes that the main point of single undertaking – that nothing is agreed until everything is agreed – would lose the opportunity for allowing for trade-offs.

The third issue relates to the question of special and preferential treatment. Brazil is facing huge pressures to graduate from this, but it dislikes this proposal. It fears that it will no longer be able to speak in the name of developing countries.

The next issue has to do with the international dispute mechanism. Brazil usually wins them and it does not lose this useful tool. Between 1995 and 2011, 426 cases were brought before the body. Brazil was complainant in 25, respondent in 14 and third party in 64 of these cases. It is one of the few countries that won the right to retaliate (on export subsidies for aircrafts and cotton subsidies). Brazil however favours dialogue with the countries subsequent to the ruling.

The fifth proposal is that proliferation of preferential trade agreements should be brought to the WTO. Brazil is uncomfortable with this idea. It does not like stricter rules in this area because this might restrict its future negotiation flexibility.

There has also been suggestion about expanding the scope of the WTO agenda, but Brazil is worried about allowing new issues on the table before old issues are settled. In addition, Brazil remains very cautious about introducing labour, social, environmental and climate change issues into trade negotiations. It believes that it would be difficult to monitor for compliance. It would want to discuss these issues in other arenas.

A final issue emerged recently on private sector initiatives in the context of the WTO. Brazil is very reluctant to accept private sector standards, certifications or voluntary labelling systems (for example carbon footprint reporting). It also points out that since these would not be government- mandated measures, policing and monitoring their implementation would be difficult.

Brazil has recently been accused of setting up protectionist measures. Its average applied tariffs have gone up from 8.8 per cent in 2004 to 10.6 per cent today, but the WTO acknowledges that Brazil has taken many more measures to reduce tariffs and facilitate trade than to increase barriers. About 2000 items have had reductions in tariffs while only about 200 items have had a rise. It uses anti-dumping measures in a very technical way and not in a politicised way.

Role in the G20 Brazil is seen as one of the key players, often speaking on behalf of developing countries. Some analysts point out that Brazil seems to have no strategy in the G20, but others see it as a strategy on its own. By not announcing previous alignments, Brazil maintains enough flexibility to act pragmatically once other positions are known. Brazil has long argued for a review of the Bretton Woods institutions and financial-sector regulations. It has also pushed for the adoption of fiscally sustainable measures, insisting that poverty reduction and social inclusion should be given equal importance than financial stability and global growth. In addition, Brazil has one of the highest rates of compliance with the G20 commitments (81 per cent).

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Brazil’s position regarding the financial crisis At the Seoul summit, Brazil raised the question of exchange rate alignments and the so-called currency war. It also challenged the US expansionary monetary policy. Brazil drew attention to the need for fiscal consolidation, but without extreme austerity measures.

By November 2011, Brazil mentioned that they would consider contributing to the European rescue fund through the international mechanism available (the IMF). By February 2012, Brazil said it would contribute to the European rescue fund but under two conditions. The first one would be to strengthen the Europeans’ firewall – the European Stability Fund. The second would be to implement IMF voting rights reforms. Of course, European countries, and especially Germany, disliked this proposition. By June 2012, the BRICS agreed to contribute to the European rescue fund provided that their aid would come attached to IMF reforms. In that case, Brazil promised $10.2 billion. Just a decade ago, who would have thought that countries like Brazil would help to bail out European banks?

Assessment of Brazil’s foreign policy Brazil manages to increase its international prestige in certain areas, while failing in others. On specific issues it sometimes acts poorly. For example, whenever Brazilians place a candidate in important international prestige positions, it rarely wins.

Even among South American countries, there is not a single vision about how the region should go forward. Does Brazil’s foreign policy actually promote its development? Good results can be witnessed, but it is hard to link them to its foreign policy.

Comments on Britain’s response to Brazil’s rise

At the international level, Britain has been cooperating with Brazil in some areas, but there are many differences too (Iran, Syria, Libya in the UN Security Council and in economic areas such as the British opposition to a ‘Robin Hood’ tax).

In the European context, Britain has done very little to push forward the signature of the Association Agreement. Britain would benefit from it, but agriculture remains a controversial issue. Also, is Britain ready to take the vacuum left by Spain and Portugal in that area?

Bilaterally, Britain talks about good relations, but is very slow to react to Brazil. Brazil on its side is not very knowledgeable about Britain. Student exchanges are still weak and there is a lack of cooperation in science, technology and innovations. Brazil would however be a good partner because it is a flexible, predictable and reasonable one.

Questions & Answers

Questions Looking at the suspension of Paraguay from Mercosur, the original idea was not to suspend it forever. Brazil has the most exposure in Paraguay and their economies are interlinked as Brazilian companies operating in Paraguay account for about 40 per cent of GDP. The suspension of Paraguay related to Venezuela’s entry into Mercosur supported by President Kirchner. Now that Mercosur is in crisis and moving backwards, Brazil seems to distance itself from the organization’s problems. What is happening? What are areas that Brazil can still influence?

Talking about the G20 and Brazil’s position in the WTO, there is a pattern of Brazil wanting to represent the developing world. On the one hand, this is an important leverage for Brazil, but on the other hand is Brazil going to be able to let go with that if it wants to upgrade? There is an uncomfortable balance between these two roles that Brazil plays.

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What will happen with the growing asymmetry between economic wealth in Brazil and the rest of the region? In the 1980s, Brazil represented about 40 per cent of the continent’s GDP. Today it is 66 per cent. Yet, Brazil is still not prepared to pay their share of the bill. Brazil has a strategic conception of Mercosur as being a platform against America’s integration. There is a lack of cohesion between Brazil’s objectives and its neighbours.

What can be said about changes at the domestic level in Brazil and how does it reflect on international organizations?

Dr José Pio Borges It took many years for Mercosur to pick up. The major step happened with a push from the Brazilian government for more Argentinean oil imports. Pertrobras made an effort, which resulted in Argentina being the third most important oil partner of Brazil. There have been problems between Brazil and Argentina, but the issues are moving forward. The major problem today relates to the suspension of Paraguay from Mercosur and the opening to Venezuela. That was a serious issue of mismanagement for Brazil. However, the notion of Mercosur and South American trade is still alive and keeps gaining importance.

When Brazil joined the WTO, it had reduced tariffs to around 12 per cent. These tariffs kept decreasing to nine per cent and peaked again recently. Agriculture is the only gain that Brazil could get from a relationship with Europe and the United States. Brazil had little to give in reducing industrial tariffs. Protective measures have been imposed on key industries, such as the automobile industry under Lula. However, non-tariff barriers are more dangerous and have greater impact than a tax rise.

Dr Mahrukh Doctor During the last two or three years, President Rousseff brought government measures back to normal. Brazilians have always accepted the developmental approach of the government and the role that it must play in supporting domestic industries (with an eye to macroeconomic stability). In recent years, Brazil has been very cautious about the way it implemented protectionist policies not to infringe WTO rules. Brazil always tries to protect the most important sectors – such as the automobile industry – without hurting international investments. Brazil will defend its industry, but within the rules. For Brazil, a long-time rules-based actor, a good citizen in international regimes and a soft power actor, it has been very important to be seen as being compliant.

Brazil does not seem to be mature enough to let go off the status of leader of the developing world. It wants to be an intermediate power. Brazilian diplomacy needs to think carefully about its long- term objectives. Paraguay’s suspension from Mercosur relates to an infringement of international law, as a consistent due process has not been followed. After this decision had been taken, Venezuela was admitted to Mercosur without any due process either. How can Brazil defend due process as the purpose of its actions, but at the same time supporting the opposite? Now that Brazil let Venezuela in and agreed that Paraguay could join again after restoring democracy, how can they settle the issue as both Venezuela and Paraguay oppose each other’s membership? Brazil sacrificed principles for pragmatism. As a supposed leader of the region, Brazil sent the wrong message. If it wants to project itself as a soft power, which implies being a rules-based actor, it should strictly follow the rules.

For Brazil, Mercosur today is a political structure that allows it to manage its conflicting relationship with Argentina in a pragmatic way.

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SESSION 3: BRAZIL AND THE CLIMATE CHANGE NEGOTIATIONS

Topics: How can Brazil utilize its energy potential and enhance its status as a global energy and environmental power broker? Will Brazil use its natural resources as a foreign policy tool? How can Brazil contribute to the energy, food and water security agendas?

Adilson de Oliveira

Climate change and energy security The problem of climate change is twofold. On the one hand, there is a clear agreement within the scientific community about the need to minimize the global consumption of fossil fuel; on the other hand, it is evident that the ordinary system is essentially based on fossil fuel. This problem is expected to intensify as the world population continues to grow and due to the fact that we nowadays consume more energy. There are two broad solutions to this problem. The first, which was more popular in the past, is to use nuclear power. This solution is very much favoured by France, for example. However, other countries, such as Germany, are completely against it and following the recent problems in Japan there is a popular dislike for nuclear solution. In addition, there is still no international agreement on how to enforce or decide on policies to control the nuclear field. Another possible solution is to use alternative energy sources. Among these are hydropower (which is popular in Latin America and in Africa), wind power (which is relatively widely used in Europe) and bio-fuel (which is popular in South America and particularly in Brazil). Bio-fuel is very promising solution but it entails a serious challenge as it requires a change in the manner in which our society is organized; to move out from centralized global large cities and spread the population. Obviously, this change is very difficult to implement in practice. Nevertheless, it is clear that climate change requires an immediate action and is not a matter that can be left to be resolved in the next generation.

In addition, the problem of climate change and global warming cannot be resolved by one single country and requires a global action. Reaching an international agreement is always a difficult task and more so when it necessitates countries to implement major changes, as in the case of climate change. Indeed, an international agreement on how to resolve the climate change problem is yet to be achieved and the prospects of achieving it are unclear. This situation can be explained by three elements, as follows:

• The emergence of large economies such as India, China and Brazil that have a strong say on the issue of climate change; hence, the solution to this matter cannot be organized and resolved between the global powers. In addition, the approach of these countries to climate change is fundamentally different than the approach of the global powers. The economic growth of these emerging economies correlates to the increase of their energy consumption. However, considering that the climate change problem was created mainly by other countries, they are unwilling to pay the costs of resolving this problem. In addition, the belief that the member countries of the Organization for Economic Co-operation and Development (OECD) have many opportunities to further increase their energy consumption and simply want to share the costs related to the increase of emissions which will result from the growing consumption. Therefore, India, China and Brazil believe that a transitional energy system should be organized in such a way that other countries will bear the costs of solving the problem. • The problem of securing the oil supply. As any solution will require a transition period of at least one to two generations, there is a need to secure the supply of oil meanwhile, both in terms of quantity and price. These factors will affect any decision on whether or not to adopt certain new energy sources. Most of the oil comes from the Middle East. In the past, the Organization of the Petroleum Exporting Countries (OPEC), the OECD and the International Atomic Energy Agency (IAEA) managed to www.chathamhouse.org 14 Brazil in the World: Brazil's New Role in Global Institutions and the British Response

govern the market by fixing a relatively stable price; however this equilibrium was broken at the beginning of this century. Since then, the market is unstable in two realms: supply and demand. The supply was affected by the political instability in the Middle East. In addition, there is the issue of who should pay the oil rents (i.e. the difference between the value of crude oil production at world prices and total costs of production). As to the demand, it is characterized by conflicting objectives; while the OECD countries try to reduce the consumption, the emerging economies, and especially China, have a growing demand for oil. The oil price has reached unreasonable levels and most developing countries cannot pay the current afford it. Lastly, this situation affects the oil price which remains volatile. • The lack of active climate change policy in the United States. Since the United States has started to develop unconventional oil it believes that the climate change problem can be left to be addressed by the next generation. In addition, facing other economic challenges, the United States does not presently wish to take any major step towards combating climate change.

These three factors explain the difficulty to agree on international action and it is unclear how such differences can be resolved.

Brazil’s policies on climate change Brazil has adopted strong policies, via taxes and regulations, in order to reduce oil consumption. As result of these policies, Brazil has a t favourable energy system as far as climate change is concerned and almost 50 per cent of its energy supply comes from hydropower and bio-fuels. Its experience, especially with relation to bio-fuels, can be used elsewhere.

An issue that previously caused concern in Brazil was the deforestation. However, the Brazilian Congress has adopted penalizing regulations and thus this matter seems to have improved; although it remains to be seen how successful the enforcement of these regulation would be. In addition, the Brazilian Congress has recently commanded the reforestation on river banks in order to protect fresh water resources. By taking these actions, Brazil secures it resources and its conditions to be able not only to provide but also to increase the global food supply.

Another relatively recent change has to do with the vast resources of oil that were found in Brazil. Today Brazil is still a marginal exporter of oil but it is estimated that it will be able to largely increase its oil exports in the coming years. The importance of such prospects is not the fact that Brazil may become a bigger exporter of oil but rather that Brazil will be able to secure oil. By doing so, Brazil will be able to diminish the dependence on the Middle East oil reserves, and consequently, to reduce the global volatility of oil supply and prices.

Brazil’s contribution to improving climate change Based on its experience and due to the fact that Brazil is becoming economic and political soft power, Brazil is prepared to take a constructive role in relation to climate change. In addition, the coasts of South America, and particularly those of Venezuela and Brazil, have vast reserves of oil. In this regard, it is clear that the technological and industrial developments that are currently taking place in Brazil will be used in relation to oil reserves in other places such as the west coast of Africa.

It is clear that the Atlantic South is going to play an essential part in the next 20 years in relation to climate change and Brazil already has a leading role in this process. It is trying to push Venezuela to comply with its good track and it takes steps to integrate South American energy systems. For example, Brazil has been building a refinery in the North East of the country in order to process Venezuelan oil (not because Brazil needs that oil but rather because this oil has no market in Venezuela). In addition, Brazil is planning to finance several hydropower plants in Peru, Ecuador, Venezuela and Bolivia. This is concurrent to the development and use of bio-fuels already employed in North Argentina, Bolivia and Paraguay as a result of Brazilian efforts. Not surprisingly, www.chathamhouse.org 15 Brazil in the World: Brazil's New Role in Global Institutions and the British Response oil companies are aware of these processes and are estimated to invest $200 billion in the next four years on oil production. The Brazilian offshore investments will serve an immense industrial laboratory where diverse range of technologies is put in place and therefore their importance.

Shane Tomlinson

The status of the climate negotiations The two big developments in 2012 were the decision reached during the Durban Conference on Climate Change to adopt a universal legal agreement on climate change as soon as possible, but not later than 2015, and the United Nations Conference on Sustainable Development (Rio+20), which dealt with the process around sustainable developments goals and again sets out 2015 for a United Nations summit to adopt a new framework (for when the Millennium Development Goals expire). These two conferences created a space for a political moment in 2015 across these two tracks to look at the issues of climate, fuel and water energy security together.

However, seizing the 2015 opportunity requires a fundamental change of the political conditions in key countries. It is thus important to improve climate diplomacy going forward in order to insure that we are able to shape such political conditions and move away from the false dichotomy of the discussion between bottom-up and top-down; it is clear that there is a need for action in both. There is a need for arc of international governments to go across the WTO, the United Nations Security Council and other United Nations mechanisms, including the World Bank and other players, but also a range of bottom-up actions that can be seen from fast up finance and other investments on the ground in key countries, and that will be the real key to moving forward. It is important to note that a big change has happened already and there is today a global low Carbon economy that did not exist 10 to 15 years ago when Kyoto Protocol was negotiated. That is a fundamental change as there is real money on the ground and trillions of dollars investments are going forward.

Brazil’s role in the climate negotiations Brazil is particularly well positioned to wield influence both given its historic role being the spokesperson for the G-77 and also its emerging role as one of the key countries in the Copenhagen Climate Change Summit (along China, South Africa and India). However, in the last few years the coalitions of the G-77 have been shifting sides; in the Durban Conference, European countries alongside a range of the least developing countries and small-middle size economies (e.g. Colombia and Costa Rica) lined up to support action on one side while India and a range of other countries lined up on the other side. This fundamental shift will surely affect Brazil’s role and the question is whether Brazil will proactively act to shape its role by moving forward from its previous alliances within the G-77 or will it have its role shaped by others.

Brazil has also demonstrated both its ability to engage constructively in a broad range of issues as well as its willingness to go outside its comfort zone, taking more of a leadership role. In addition, Brazil’s growing role in international development assistance means that it has different diplomatic leverages that can be used to influence the negotiations.

Brazil also provides an interesting microcosm for managing the risks nexus across the energy, water and food security agendas, and a much better example than the one provided by European countries for a range of other countries on how to manage this trade-off. This experience can serve an additional leverage for Brazil.

As to Brazil’s energy reserves, there is a debate in Brazil on how to use its fossil reserves and this debate could potentially create a tension around its low Carbon future. How Brazil resolves this tension and how it sees its long term development strategy therefore becomes critical to the role that it will play in international negotiations. It might use these reserves as a counter-balance in the negotiations and thereby become a global energy and environmental power broker.

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However, as emphasized by Prof de Oliveira, the key issue is how to manage the transition going forward and how to decide on the role of different technologies. Many countries have a similar dilemma on how to resolve these issues. Thus, a shared-leadership agenda, based on new alliances, could make a big difference and influence international negotiations.

One of the key lessons learned from the Copenhagen Climate Change Summit is that moving along the old alliances will not solve the climate change problems and that in order to overcome these problems new meaningful alliances need to be formed. Brazil, as well as South Africa, stands out as being potentially interesting candidates to redefining what leadership means in the international level. It is clear that Europe cannot lead international negotiations as it did in the past as, following its expansion to include Eastern European countries, Europe can no longer take the same unilateral action that it was able to take in the late 1990s and it now has to move forward in coalition with other countries and make its progress there. Thus, there is both a need and a place to form new alliances that could reframe the climate negotiations and potentially optimize our opportunities in 2015.

Questions & Answers

Question Considering that key players like the United States and China oppose (at least to some extent) internationally binding commitments irrespective of the nature of commitment, and on the other hand, European countries are more comfortable with supporting international goals, what is Brazil’s approach to internationally binding commitments?

Adilson de Oliveira Brazil has already made domestically binding commitments and these commitments are complied with. However, Brazil’ approach to internationally binding commitments will be determined by the steps that will be taken by other countries and specifically by the United States and Europe. If they will give up on climate change policies, as the current tendency of the United States seems to suggest, that may well affect Brazil’s willingness to submit itself to internationally binding commitments. So far, Brazil has proved its commitment to climate change, but it will not pursue this goal alone.

Shane Tomlinson As a soft power Brazil should be in favour of rule-based systems that maximise its leverage. However, that is not necessarily the consistent outcome of the Brazilian position, certainly within the climate change negotiations; Brazil has consistently stood with the G-77 on quite hardline issues. However, being recognized as a soft power, Brazil could do a lot to shape the rules in its favour. But to do so, it will need to recognize and internalize these rule-based systems. Thus, there is a real opportunity for Brazil here and no fundamental domestic reason to oppose internationally binding commitments.

Question Now that Brazil may become a major oil producer and exporter, and considering the fact that Brazil inherited its clean energy agenda and did not develop it by itself, is it going to abandon its pursuit for clean energy?

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Adilson de Oliveira Once again, this will depend on how things will develop internationally. If there would be no international market for bio-fuels and Brazil will not be able to export bio-fuels it is difficult to see how Brazil alone would be able to continue using bio-fuels. The international community should make its intentions clear about this in order to encourage Brazil to continue developing clean energy and pursuing climate change goals. In this regard, it is also important to note, that being a soft power, Brazil needs the financial and technological support of powerful countries to be able to develop its industrial capacity to further improve its clean energy systems.

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SESSION 4: BRAZIL AND AFRICA Topics: Is Brazilian Engagement in Africa driven by a ‘Southern solidarity’? What distinguished Brazil from other emerging powers on the continent? How does their Africa strategy fit in with wider Brazilian foreign policy and what are the prospects for triangulation (with India and South Africa) and south-south cooperation?

Christina Stolte Looking at Brazil’s Africa engagement, it is noticeable that it has not attracted international attention as much as other international actors. There is also not a similar debate as there is with China and even India’s presence in Africa. Nevertheless, Brazil has pursued an active Africa policy over the last ten years and has become a relevant actor on the continent.

Brazil pursued a number of multilateral initiatives. On the diplomatic level, Brazil undertook 13 presidential visits in the last decade and doubled its number of embassies. On the trade level, trade increased six times – from $4 billion to $28 billion from 2002 to 2012. Brazil imports from Africa have risen more sharply than its exports.

Looking at the composition of trade and Brazil’s major trade partners, one is confronted with a ‘typical’ pattern of BRICS countries looking at opportunities to access resources. All of Brazil’s major trade partners in Africa are resource-rich countries. Oil accounts for almost 90 per cent of all Brazil’s imports from the continent. The biggest Brazilian companies in Africa are energy ones closely linked to the resource sector. However, most of Brazil’s oil-based trade reflects the past rather than the future. On two occasions, Brazil needed to secure resources. Economic engagement in resources-rich states dates back to the 1970s when the military regime supplied its demand by importing resources from Africa. Ties with resources-rich countries also proved to be valuable in the wake of the new millennium when a wave of nationalism in South America led Brazil to diversify away from politically motivated energy exporters in its neighbourhood.

Things have changed dramatically since 2007 and 2008, when the oil biggest discovery in 20 years was made in Brazil. In the next years, Brazil will become a major oil exporter and its demand from Africa will diminish.

In this context, why is Brazil investing so heavily in its relationship with Africa? Economically, Africa is becoming a growing consumer market. Brazil looks at Africa as a promising market to export its goods and services. However, Brazil’s interests in Africa go beyond the economic sphere. Brazil’s profile in Africa has been shaped by its commitment to Africa’s development challenges. It has presented itself to Africa as a partner for development rather than a business partner. Brazil has positioned itself as a rising power of the South, strengthening its discourse on southern solidarity. It has provided a South-South cooperation option based on its own development experiences. More than 50 per cent of Brazil’s support to development cooperation is directed towards Africa and not to Brazil’s own neighbourhood.

As a country that has overcome key development challenges, Brazil offers African countries its knowhow in a range of relevant areas. One area is the fight against poverty. As it switched from being a food importing country to a superpower in agriculture in a little more than thirty years, Brazil has gained the sort of experience that could be applied to the African context. The African continent has gone the other way, moving from being a net food exporter to a food importer today. Against this background, Brazil has offered to assist African countries in their struggle to tackle food security. Brazil is supporting research and knowledge sharing in the agriculture sector. Brazil also provides assistance on other anti-poverty measures. It focuses on financial inclusion and health for instance. The fight against HIV/Aids has been an important area of Brazil’s support. In Mozambique, Brazil opened a factory for generic aids products. Brazil is also sharing its expertise in the energy sector. Energy scarcity is one of the main obstacles for African development. Despite the abundant reserves of resources, more than 90 per cent of African rural population does not have access to modern energy.

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By providing cooperation in the field of development, Brazil has raised its international profile as a leading actor in the south and the represent of the development world. Brazil certainly profited from its economic engagement by winning new markets for its manufactured goods, but it also benefited through the enhancement of its bargaining power and its international status. The country has gathered support from African countries at the UN Security Council. In addition, it has benefited in an indirect way by engaging in a foreign continent and offering development assistance. It thereby rose from being an aid receiver country to becoming a respected donor country. Not long ago, Brazil was associated with a broad range of socioeconomic challenges, but it is now referred to as a model for successful economic development. By exercising leadership on key human security challenges of the twenty-first century, Brazil is increasingly welcomed at the top table of decision- makers. Brazil’s Africa policy should therefore not be seen as a mere economic strategy, but as a broader foreign policy strategy to gain recognition as a global power.

Dr Marco Vieira Is Brazilian engagement driven by Southern solidarity? The main academic analyses of Brazilian foreign policy tend to dismiss the language of ideas and values that have been driving the foreign policies of developing countries for a long time. This is an important gap when looking at emerging powers’ international relations. There is a need to better qualify and explain the concept of emerging power. Emerging powers seem to be defined by the requirements that they fulfilled in order to be recognized as such by conventional great powers. Emerging powers also have a different source of legitimacy in international relations and that is their role as normative leaders in the developing world.

Based on this definition of emerging power, Africa is a laboratory for Brazil to experiment about its role as an emerging power of the south. Brazil has used this narrative to justify its growing presence in Africa. Most analyses look at the economic or the political incentives – in terms of gaining votes in the UN Security Council or the new scramble for Africa – but this needs a better analysis.

To understand the crisis in multilateral organizations, three main theories can be used. Stephen Krasner, who wrote Structural conflict: the Third World against global liberalism in 1985, framed the first theory. He looked at similarities between Third World countries and other countries in terms of wealth and power. In this sense, the quest for wealth and power becomes an element for international influence. The second theory was further developed in 1996 by Susan Strange (‘The retreat of the state: The diffusion of power in the world economy’) who looked at the dimension of security and ideas. If states control three dimensions – the economy, security and ideas – they can project power more effectively. The third theory added another element by looking at the concept of hegemony. The consensual hegemony of the 21st century is liberal internationalism. This hegemony is in crisis today. The resulting question is to look at what comes next. What can Brazil and China bring to the table?

Africa is a case study for those changes because it is facing an ideological struggle. Development cooperation is divided between traditional Western countries and emerging powers. Is the new model of development cooperation brought by emerging countries enough to be an alternative to traditional Western donors? Brazil uses a language of the Third World movement – encompassed in Lula’s foreign policy. It is a model of development cooperation among equals and one that respect the sovereignty of states. Brazil does not link any issue that is debatable with democracy and human rights. Its priority is that people receive the assistance they need. It is not only an altruistic power; Brazil’s goal is mainly to be perceived as a business partner. It wishes to share its knowledge based on its own developmental experience. Some of Brazil’s ‘social technology’ can be easily transferred to the models of African states.

Western donors have been relatively ineffective because they did not act on the basis of their experiences. New partners promote different approaches, but all remain an alternative to the Western model. India tends to refer to the Bandung Conference and the African-Asian spirit while Brazil focuses on its African legacy. All of them feel the necessity to justify their actions as South- South solidarity. It is also a genuine attempt to change the rules of the international system. www.chathamhouse.org 20 Brazil in the World: Brazil's New Role in Global Institutions and the British Response

The case of Africa highlights the changes happening on global governance as an alternative to the conventional liberal internationalist model. Of course, new actors on the continent still have vested interests: countries want influence, political recognition and economic opportunities. By becoming a donor state, Brazil leverages its position in the international arena. Linking Brazilian private companies to new southern markets also brings new prospects for the country.

Brazil’s involvement in Africa is an important factor of south-south cooperation. Through its involvement, it plays a role in international platforms. For example, the last conference on aid effectiveness in Busan, South Korea, was the first time donor countries allowed Brazil, India and China to take part in the debate. The idea of linking development assistance to democracy and human rights was central, as new donors do not tend to follow the same opinion as traditional donors.

Another factor triggered by Brazil’s involvement with Africa, is the competition between emerging powers themselves. In Angola for example, despite the fact that China is investing heavily, Brazil has a stronghold due to cultural factors. In addition, new collective attempts have arisen, such as the IBSA fund – by India, Brazil and South Africa – which was established in 2003 and has a development cooperation component.

New actors’ engagement in Africa is contributing to the establishment of new geographical patterns allowing previously ‘outcast’ countries to also benefit (Zimbabwe and Sudan). To strengthen Brazil’s involvement on the continent, there is a need to see how African states react to emerging powers. They are not passive recipients of aid, but play out the different donor perspectives. Finally, there is a need for a better understanding of domestic politics in Brazil. Brazil’s foreign policy with Africa is far from coherent and centralised. There are a number of different initiatives happening, not only controlled by the government.

Questions & Answers

Questions What are the so-called emerging countries all about? They are more than supporting actors, they seek increasing influence in global issues and they have 40 per cent of the world population and 20 per cent of the world GDP. Some people say that emerging powers are a challenge to the global order. Do emerging powers constitute a risk or an alternative to the US status of superpower? According to some approaches, emerging powers might become conflict prone powers while others say that it might embrace the western liberal order. What can we believe? The South-South cooperation brings another level in the relationship, but does it really bring an alternative to traditional partners?

What is the size of Brazil cooperation in Africa? What is the size of Brazilian FDI in Africa?

How do domestic regulations influence Brazil’s relationship with Africa?

Dr Marco Vieira Emerging powers mean different things in different contexts. One can look at the angle of normative leadership in international development. Assessing how a country is reshaping the rules of the game and the international principles is considered to be a valuable characteristic of an emerging power. Without assessing the value of this change, there is also a clear attempt to define them as an alternative way to replace the liberal model of the post-Second World War. This attempt is especially driven by China, even though it is not a conscious search for change but rather a reluctance to accept norms. Norms that have been universally accepted will fundamentally change if China becomes an economic superpower. Other norms and normative believes in emerging countries could similarly play a key role in reshaping the international system in the second half of www.chathamhouse.org 21 Brazil in the World: Brazil's New Role in Global Institutions and the British Response the twenty-first century. The BRICS as a group do not have a normative agenda, but IBSA does. IBSA made an attempt to come up with a shared identity based on restructuring the economic order and spread common values.

Christina Stolte Brazilian cooperation is so decentralised that it is hard to assess the exact money spent in Africa. The Brazilian Cooperation Agency (ABC) is a coordinating institution, but nineteen ministries are equally involved in cooperation, and Brazil also gives money to international agencies and institutions. There are no data on FDI. The estimate is between $10 and $20 billion in Lusophone Africa.

Questions There are three levels to Brazilian relations with Africa. First, the level of strategic partnership encompassed in the bilateral relationship between Brazil and Nigeria, South Africa and Angola. Second, there is the cultural relationship between Brazil and the rest of Lusophone Africa. Finally, a third level includes other key African players such as Ghana and Senegal. For this category drivers are different. Is it important to assess those differences in order to define a comprehensive strategy?

It is important not to understate the importance of language. The success of Brazilian technical cooperation has been largely with Lusophone Africa. Many of the same technologies cannot be transferred to other languages. Given these cultural ties between Brazil and Africa, is there potential to expand to other countries?

It is also important to look at the interest for Africa in Brazil. In a 2010 census, 50.7 per cent of the Brazilian population identified itself as being from African origin. There is a lack of national debate regarding its role in forging new international assistance architecture. In the future, the Brazilian government could face hard times justifying its development cooperation scheme when there are still major problems domestically. Strengthening a national debate could also help ABC justifying its role. Now that there is a more conservative government, is there a consensus on their foreign policy to Africa?

A major aspect of the Brazil-Africa relationship today still lies in the hands of private sector companies. Billions of dollars are spent in Africa. Now, the challenge for the government is to facilitate the involvement of small and medium enterprises to consolidate its role in Africa

Where does the Community of Portuguese Language Countries (CPLP) rank in terms of priority?

What do the 37 Brazilian embassies in Africa do?

Dr Marco Vieira Each African country requires a different approach. Looking at Brazil’s involvement in Mozambique and Angola, the types of investment are very different. One should look at a common justification for Brazilian investment on the continent. For this, the Southern solidarity discourse plays a role. Beyond this common denominator, each bilateral relationship has a different demand and approach from the Brazilian government. Brazil is still trying to define its role on the continent. If the government’s foreign policy changes according to political orientation, the relationship might change accordingly.

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Christina Stolte Brazil attaches much importance to the CPLP as a diplomatic instrument to gather support at the UNSC. On Brazil’s ties with Lusophone Africa, it is important to bear in mind that Brazil is not presenting itself to Africa as a Lusophone country as much as an afro-Brazilian country. Brazil is trying to present itself as a country that wants to cooperate with the entire continent and President Lula made an effort to extend Brazilian presence outside Lusophone Africa. Most embassies are very small, but they are the symbol of Brazil’s global presence.

ABC activities will most probably not be further expanded under the current government. In contrast with Lula who travelled the world and expanded cooperation agreements, President Rousseff is trying to focus on previous promises rather than the expansion of new partnerships. Brazil has over 400 cooperation projects. According to Rousseff, the scope of ABC had expanded too much in a time too short for Brazil to cope with the expectations.